This is a mindset shift away from proprietary control, which was traditionally driven by commercial demands. “For example, Apple’s iPhone is a platform – beyond the device you have all the apps, but it’s a closed platform,” says Lipschitz.
When systems can talk to each other, innovation and collaboration is accelerated.
“There is regulation coming through to ensure open banking platforms,” says Lipschitz. In Europe, the Payment Services Directive gives clients control over their financial data – so if they give their consent, their bank must allow data sharing and payments with third parties that meet the necessary standards. An Australian data sharing framework was also recommended by the Federal Government’s Standing Committee on Economics’ Review of the Four Major Banks: First Report.1
Macquarie announced its own Open Platform in May, to enable seamless data integration between its banking platforms and third party providers.
“We believe big tech and fintech will converge with financial services, and we want to support the new experiences for clients that can come from this,” says Lipschitz.
Macquarie already had closed connectivity for its business banking and wealth platforms. “This will take our services to the next level. We see a lot of opportunities for our clients through the innovation an open banking platform can provide.”
Seamless experience, industry-relevant solutions
Open APIs have a strong track record of fostering innovation. For banking clients, this means new products that make life and business tasks easier by sharing data to streamline, automate, recommend or provide greater visibility.
“Through the Open Platform developer portal, external developers can test their apps in our ‘sandbox’ – a test data environment that mimics production,” says Lipschitz. When available for business accounts, this solution could integrate with accounting software providers such as Xero, whereby account information will be securely accessed when you register with Xero – no paperwork required.
Speed up cash flow with smarter technology
He believes an open platform empowers smaller players to participate, filling gaps for targeted industry issues. “We’ll see many niche services emerge to solve specific use cases – solutions that will help clients run their business and have a much better experience.
Efficient, cost-effective innovation
For fintech start-ups and software developers, open APIs provide access to existing infrastructure, saving time and money in the development process.
“API is referred to as both a pipe and a building block,” says Lipschitz. “It distributes the data, but it’s also a bit like Lego: you can put different APIs together to create something unique.”